Finding truly great foreclosure deals is what separates the successful from the steam rolled. In this business, it’s the difference between a steak dinner and a cup o’ noodles life for you and your family.
Each market has it’s “sweet spot”, or perfect type of deal. And figuring out what kind of market you’re in (Rising, Top Flat, Falling, or Bottom Flat) only takes a simple search on just about any home values website.
Then once you know what market you’re in, then it comes down to a simple 6 Step process.
1) Locate Excellent Foreclosure Deals
Nowadays, this is the easiest part of the process. The internet has made it so that you can find free preforeclosure lists, browse thousands of short sale leads, see what Auction deals are available in any market around the country, and look at thousands of REO deals, all while sitting at home in your PJ’s and sipping your morning coffee, or on your laptop or phone on the go if you like.
I recommend and automated system that generates leads that only YOU know about. If you’ve never been the only one making offers on a property, you need to try it. It sure beats bidding wars with the competition!
2) Prescreen Leads
Once you know the right types of deals for you and your market, all you have to do is apply a simple formula for each deal type, and see which properties are a “fit”. If it’s not that easy for you in your business, then you need a system.
Every successful business, in or out of real estate, has a success formula that works for their market. McDonalds has a success formula for burgers and fries, just like I teach a success formula for Foreclosure Investing.
Just like a McDonalds franchisee knows exactly what to pay for frozen patties and buns, exactly how to turn those into hamburgers, and exactly how much to charge for a burger to be profitable and successful, you can find discounted foreclosure properties, buy or control them, and sell them at a higher price than you paid.
Each type of deal you’ll ever do has a simple offer to make to the seller, whether that seller is an REO Bank, a For Sale By Owner private seller, a Realtor, an Auction, one of my “hidden liens” deals, or anyone else.
When a lead comes in, all you have to do is decide, “Do I even want this deal, and if so, at what price and terms?” Which brings us to…
3) Make Offers
If a property is in your market area, and is the type of property (single family, townhouse, apartment building, whatever) that you like, you can figure out the perfect offer in 30 seconds flat.
Then once you know what you can offer, just ask the seller intelligently if they’ll accept what you have to offer. It really is that simple.
More Investors blow the deal at this stage by talking too much or trying to “enter negotiations” or whatever. Don’t do that. Just ask. And ask intelligently. And when they say, “Yes!” follow through and get it in writing.
4) Generate Buyers
This can be the scariest part of the process for a new Investor, and is usually the easiest part for experienced ones. That’s because it’s the simplest part of this whole process to systemize and have done for you by someone else.
If you’re flipping foreclosures to other Investors, you can save their contact information to build a Buyers List and use that list time after time and flip properties to.
If you’re Retailing houses to owner occupants, you can easily put the whole selling side of your business on what I call “97% Automatic” and have most of this done for you, while you go find the next deal!
5) Close the Deal
Once you find the best Buyer for the property, whether wholesale or retail, you MUST close quickly. Remember, every day you wait before the closing is another day that something, anything could go wrong. So do what you can to move the process forward as fast as possible.
Make sure the closing company or Attorney has everything they need, stay in touch with the Buyer and let them know what they need to do to close, and nake sure all the little extras like appraisals for retail deals or contractor’s estimates for rehabs, are taken care of quickly and smoothly.
Then on closing day comes the best part – Get Your Check!
Well, actually, nowadays they usually just wire the money into your bank account, but it’s still pretty awesome to see that you’ve managed to turn an unwanted (or under wanted) house into a good deal for someone else, and helped yourself in the process too!
And last but not least;
6) Do it Again!
There’s a lot of what I call “One Hit Wonders” in this business. Heck, REIA clubs and Real Estate Investing Forums are chock full of them. They get a little ego boost from having done one deal, and they spend the rest of their lives crowing about it.
Don’t be that guy (or gal).
Instead, work on building the systems you just learned and streamlining and improving them with each deal you do, and pretty soon you’ll have a consistent, repeatable Foreclosure Investing Business.
You don’t need any distractions, those “bright shiny objects” that keep most people from focusing on what it really takes to be successful. It’s so easy to miss this lesson and get pulled away from building your business and toward unproductive and time-wasting tangents.
Focus on these six steps, and nothing else. If you follow this process for just a few months, maybe even just a few weeks, your income and financial future will be changed for the better forever.
Though the results are great, there’s no “Magic Pill”. You have to take specific steps, follow through consistently, and don’t be afraid of a little hard work to get started.
If you do that, your investing will be a success!